OKI to Leave Americas Market Amid Declining Business & COVID-19 Pandemic
Industry Consolidation Is Another Force at Work in the Americas
Last week, OKI Data Americas announced it would be pulling out of the North, Central, and South American markets, discontinuing the sale of its printer hardware effective March 31. This move was not a big surprise given the company’s declining performance in the Americas, consolidation occurring within the office printer market, and the COVID-19 pandemic’s impact on office print demand.
OKI has sold a variety of office and graphics printers in the Americas, including single-function, multifunction, dot matrix, wide format, color production, envelope, and digital transfer devices. According to OKI’s most recent annual report, the Americas represents about 6% of the company’s total net sales (of about $4.2 billion)—which also includes video conferencing systems, communication servers, VoIP software, ATMs, and intelligence transport systems.
|OKI Revenue by Region|
|Source: OKI’s Corporate Brochure for Fiscal Year Ending March 31, 2019|
From the fiscal year ending March 31, 2018 to the one ending March 31, 2019, OKI saw its North America revenue decline 15% to $139 million, while Latin American sales fell 42% to $128 million during this period. This aligns with a decline in LED-based office equipment placements in the region.
According to Keypoint Intelligence’s market sizing, OKI’s single-function and multifunction office printer placements plummeted 56% in North America during the 2017 to 2019 calendar years. OKI’s share of the North American office equipment market is now just a small fraction of a percent.
|OKI North American Single-Function Printer & MFP Placements, 2017-2019|
|Source: Keypoint Intelligence Market Sizing|
Most OKI devices being sold in North America are single-function (91%) and B&W (79%). Many of these devices are placed in sectors like retail, government, and healthcare. While OKI had been trying to break into the A3 market (our Office CompleteView subscribers can access coverage of this initiative here), virtually all of its sales were still A4 in nature in 2019. Recently, OKI has played mostly in the 31-44 ppm speed segment, with 90% of placements in this range.
One could argue that, within the Americas, OKI fell victim to a shrinking market, industry consolidation, as well as products and channel strategies that weren’t necessarily as cutting-edge or established as the competition. OKI’s performance in other regions showed a smaller decline or even growth—suggesting that the demand for more basic B&W single-function products persists more elsewhere.
With the COVID-19 pandemic taking a huge toll on all office printer and MFP manufacturers, it’s clear that OKI is facing an additional blow to its business in the Americas. We believe that OKI may be more impacted than some of its competitors given its strong reliance on the retail market—one of the hardest hit sectors of the economy over the last six months.
As OKI releases more information about its Americas and printer business in the coming months, we will have more insight into how exactly the pandemic has shaped recent performance. That said, the recent restructuring of its business units into “Solutions Systems,” “Components & Platforms,” and “Others” will make it more difficult to assess its print-related performance going forward.
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